Business & economy, Local government

County, MCDC settle Enterprise lawsuit over records, promising more transparency

VALE – Malheur County and the public company overseeing the Treasure Valley Reload Center will settle a lawsuit by paying the Enterprise $40,000, training county employees on public records law and acknowledging the Nyssa rail project could have been “better structured to promote transparency.”

“The press plays an important role in informing the public about TVRC,” according to terms of the settlement.

The agreement ends a lawsuit the newspaper and its publisher, Les Zaitz, filed last September against the county and Malheur County Development Corp. to enforce the state public records law. The newspaper had relied on public documents to report on financial mismanagement and project delays.

Malheur County and the development company pledged to be more transparent about the project, which is far behind schedule and short of money to finish construction.

Under terms of the agreement, MCDC will pay the Enterprise $20,500 and the county will pay $19,500.

Malheur County agreed to require training at its expense for county officials on the Oregon Public Records Law. The training, to be done by the state public records advocate, is to be completed by the end of the year.

The public entities acknowledged change was needed.

“Malheur County had a unique economic development opportunity for which there was no existing model,” the agreement stated. “In retrospect, the program, which included MCDC, should have been better structured to promote transparency.”

The statement continued, “The county and MCDC have made significant changes to the program to promote transparency that did not exist before.”

After the lawsuit was filed, the Malheur County Court adopted changes to the county’s public records policy. The MCDC Board last month approved a new plan for “maintaining strong communications” including a “proactive media relations program.” The plan is intended to help the community “feel informed, involved and engaged in the project.”

“This ends the years of obstructions and delays that have kept vital information away from the newspaper and, more importantly, away from the people of Malheur County,” Zaitz said. “We pursued the lawsuit not for money but to enforce the public’s right to know what its government is doing.”

The payments will go toward the newspaper’s legal expenses.

Malheur County Judge Dan Joyce, who signed the agreement for the county, didn’t respond to written questions.

Grant Kitamura, development company president, declined comment, but the new executive director of the company issued a statement following the agreement, reached on Thursday, May 11.

“The Malheur County Development Corporation is pleased to have reached agreement with the Malheur Enterprise and Les Zaitz to resolve ongoing issues surrounding public records requests,” according to the statement, issued by Shawna Peterson, who was named executive director in March.

Public records advocates heralded the agreement for the public commitment to transparency.

Lisa Zycherman, deputy legal director of the national Reporters Committee for Freedom of the Press, said most public records cases, when settled, typically require the public body to release the records in question. Rarely, she said, does the settlement require the department heads of an agency receive training. 

“An acknowledgment on the part of the government that it will endeavor to remedy deficits in public transparency is a victory for the public,” Zycherman said. 

Todd Albert, the state public records advocate, said he had not seen such a settlement. 

Albert said from a “transparency and best practices perspective,” the settlement is a “helpful acknowledgment” by the county and development company. He said that recognizing the mistakes surrounding public records law when they happen is significant. 

“Any case like this should be a reminder to all public bodies that the public records law is one of disclosure, not confidentiality,” he said.

He said the case underscores that government entities must effectively communicate and work with those who request public records to release as many documents in a timely and “cost-efficient” manner.

In its suit, the Enterprise said that public records had been illegally withheld or destroyed and that excessive fees had been charged.

The suit originally named Greg Smith, who was the county’s economic development director from 2013 until he quit last year. He stayed on as project manager for the Treasure Valley Reload Center but abruptly resigned that role in February.

“Malheur County and MCDC failed to train and supervise its agent to shield themselves from public scrutiny regarding their spending of public dollars and their management of TVRC’s construction,” the lawsuit said. 

The Enterprise dismissed Smith from the lawsuit because he serves as a state representative based in Heppner. Legislators are protected from civil suits when the Legislature is in session.

But the actions cited in the lawsuit happened during Smith’s tenure.

In a deposition last December, Smith conceded that he destroyed text messages that were public record.

He testified under oath that “at times” he received text messages for his work for as the county’s economic development director, project manager and board member of the reload center project. 

Asked what he did with these public records, he answered: “Read them. And then delete them.” He was asked if he ever retained them. He responded, “Some.” 

According to court documents, Smith also failed to fully disclose a project budget for the reload center, instead providing a photograph of a “scribbled on” version of the budget.

Malheur County District Attorney Dave Goldthorpe subsequently ordered the development company to turn over the document. It has yet to do so.

Under state law, public bodies are required to provide records to anyone who requests them “as soon as practicable and without unreasonable delay,” unless those records are exempt from disclosure.

Governmental entities consider text messages a public record. Under the law, elected officials and staff must retain their texts and emails related to public business.

During his tenure in Malheur County, Smith acted to obstruct and intimidate the newspaper. He once triggered a request for a criminal investigation of the Enterprise for sending emails to his staff in off hours. Then-Sheriff Brian Wolfe quickly concluded there was no crime.

Smith undertook a practice of not granting interviews to the Enterprise or answering written questions from the newspaper. The  MCDC board had taken questions from reporters during meetings but Kitamura halted that practice last year. Kitamura reversed the prohibition immediately after Smith resigned.

The Enterprise relied on public records to uncover the depth of the financial troubles that still impair the reload center project. The newspaper reported that project leaders committed to contracts without having money to fulfill them, wrongly listed how much money was coming from the state for the project, and falsely indicated that a $2 million rail spur wasn’t necessary.

“The reporting by the Enterprise represents a primary duty of the press – to hold those in public positions accountable for their actions,” Zaitz said. “We sought only the truth, which the people of Malheur County deserved to have. We took no pleasure in turning to the courts, but those in charge left us no choice.”

Dan Norris, the attorney representing the Enterprise, said Malheur County commissioners and the Malheur County Development Corp. recognized the “crucial role” the press plays in the U.S. 

“Hopefully, this is the first step in regaining the public’s trust as they complete the Treasure Valley Reload Project,” Norris said.

Norris said the settlement also “cleaned up” a portion of “the mess” that Smith, the former director of MCDC, created with his “blatant disregard of the public record laws.”

Smith did not respond to emails or voice messages seeking comment.

Jack Orchard, a Portland attorney representing the Oregon Newspaper Publishers Association, said he occasionally had seen a settlement that requires employee training, but not often. Orchard said the settlement is “appropriate” because state law requires retaining public records, including texts and emails.

Regulations governing the retention of records, Orchard said, have become difficult to enforce as it is easy for public officials to delete them electronically. 

The acknowledgment was an “excellent addition” to the monetary settlement, Orchard said.  

“To do this in a public way is quite valuable for government transparency,” he said. 


Deposed: Greg Smith on deleting texts, records

News tip? Contact reporter Steven Mitchell: [email protected].

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